Analysis of factors affecting the rise and fall of the domestic cotton market (December)

Bullish Factors

　1. Cotton imports continue to decrease. According to statistics from the General Administration of Customs of China, my country imported 41,000 tons of cotton in October 2016, a decrease of 19,000 tons or 31.8% from the previous month; a year-on-year decrease of 0.06 million tons, a decrease of 1.5%. From January to October 2016, my country imported a total of 697,000 tons of cotton, a year-on-year decrease of 505,000 tons, or 42%.

　2. Cotton output decreased year-on-year. According to the cotton output survey results of the National Cotton Market Monitoring System in late October, China’s average cotton yield in 2016 was 111.2 kg/mu, a year-on-year increase of 9.2%, and a decrease of 0.8 percentage points from the August survey results; calculated based on China’s actual cotton sowing area of ​​43.845 million acres. , the total output is estimated to be 4.877 million tons, a year-on-year decrease of 6.5%, and a decrease of 0.8 percentage points from the August forecast.

　3. Outer yarn imports continue to decline. According to new statistics from the General Administration of Customs of China, in October 2016, my country imported 140,700 tons of cotton yarn, a month-on-month decrease of 8.60%, and a year-on-year decrease of 19.25%; it exported 26,000 tons of cotton yarn, a month-on-month decrease of 12.54%, a year-on-year increase of 17.27%. %; net import volume was 11.47 tons, a decrease of 7.65% month-on-month and a year-on-year decrease of 24.57%. From January to October 2016, my country imported a total of 1.5916 million tons of cotton yarn, a year-on-year decrease of 20.40%; the cumulative exports were 293,200 tons, a year-on-year increase of 1.46%.

　4. Textile enterprises’ raw material inventories have declined, and their purchasing intentions have increased slightly. A survey by the National Cotton Market Monitoring System shows that as of November 9, the average cotton inventory usage days of the sampled companies was approximately 31.1 days (including the quantity of cotton imported to Hong Kong), a decrease of 5.7 days month-on-month. According to relevant data, the national cotton industry inventory is approximately 646,000 tons, a month-on-month decrease of 15.6% and a year-on-year increase of 2.8%. The purchasing intention survey shows that in early November 2016, 70% of the companies planned to purchase raw materials, an increase of 1 percentage point from the previous month; 4% of the companies did not plan to purchase cotton, a decrease of 2 percentage points from the previous month.

　5. Some economic indicators at home and abroad have improved. In the third quarter of this year, the real gross domestic product (GDP) of the United States increased by 3.2% on an annual basis, exceeding expectations and hitting a two-year high. Market participants believe that a rate hike in December is highly likely. China’s official manufacturing PMI in November was 51.7, an increase of 0.5 percentage points from the previous month, continuing an upward trend. In addition, data such as consumption and industrial added value also recovered in November.

Bearish factors

　1. New cotton is on the market on a large scale and transportation bottlenecks are alleviated. As of November 25, the national new cotton picking progress was 96.1%, the national sales rate was 86.5%, the national sorting rate was 79.4%, and the national sales rate was 23.2%, a year-on-year decrease of 4.2 percentage points, of which Xinjiang’s sales rate was 21.2% . According to estimates, as of November 25, a total of 4.057 million tons of seed cotton and lint cotton have been sold nationwide, and a total of 3.220 million tons of finished lint cotton, including 2.848 million tons of Xinjiang finished lint cotton; a total of 942,000 tons of lint cotton have been sold, a year-on-year decrease of 243,000 tons, of which Xinjiang Sales of 752,000 tons of lint cotton.

　2. The reserve cotton rotation time is advanced. Recently, the Development and Reform Commission and the Ministry of Finance announced that “there will be no rotation of reserve cotton during the launch of new cotton (currently until the end of February next year). The rotation of reserve cotton in 2017 will begin on March 6, and the deadline is tentatively set at the end of August.” , the daily listed sales quantity is temporarily arranged at 30,000 tons.”

　3. Exports of fabric workwear continued to decline. In October 2016, my country’s exports of fabric products and workwear fell by 5.73% month-on-month and 9.28% year-on-year. Among them, fabrics (including fabric yarn, fabrics and products) fell by 6.64% year-on-year, and workwear (including workwear and clothing accessories) ) dropped 10.96%.

　4. The price difference between yarn and cotton narrowed. In the past month, domestic cotton prices have increased more than yarn prices, and spinning profit margins have shrunk. On November 30, the domestic cotton price increased by 647 yuan/ton, or 4%, from the previous month. The price of pure cotton carded 32-count yarn increased by 340 yuan/ton, or 1.4%, and the yarn-cotton price difference narrowed by 307 yuan/ton.

　In May. In November, the central parity rate of the RMB exchange rate against the US dollar continued to fall rapidly, and is currently temporarily stable at 6.89. The slow depreciation of the RMB exchange rate is beneficial to fabric exports, but rapid changes in the exchange rate have disrupted the operations of export companies.

AAAWQ32RDRGFJ

Disclaimer:

Disclaimer: Some of the texts, pictures, audios, and videos of some articles published on this site are from the Internet and do not represent the views of this site. The copyrights belong to the original authors. If you find that the information reproduced on this website infringes upon your rights, please contact us and we will change or delete it as soon as possible.

AA